The
Government of Karnataka under Karnataka Act No.9 of 2009 has brought out
certain amendments to the Karnataka Stamp Act, 1957 effective from l"
April, 2009. According to this Amendment Act and in terms of article 5(t)
thereof, stamp duty chargeable for joint development agreements relating to
construction or development or sale of immovable property is at the rate of one
rupee for every one hundred rupees or part thereof on the
2. The
estimated cost of construction of proposed construction or development or
proposed development of the property as the case may be which is the subject
matter of such transfer under the agreement in accordance with the provisions
of sec.28 of the Karnataka Stamp Act, 1957 or
3. On the
consideration of such transfer, whichever is higher?
It is the
normal practice that when any landlord desires to develop his agricultural land
into an apartment complex, he would enter into a joint development agreement
with the developer of his choice. It is also the normal practice that when such
joint development agreements are entered into, only the total built up area and
the undivided share of land would be shared between the landlord and the
developer at the agreed ratio. Not only this, at the time of execution of joint development agreement it would be premature and not feasible for the developer
to estimate the cost of construction or the proposed construction or
development and sharing of square feet area. In spite of this factual position,
when joint development agreements are presented for registration, some of the
sub-registrars in Bangalore have been insisting on mentioning some figure as
the proposed cost of construction to arrive at the stamp duty payable on
registration of such a joint development agreement or the same is referred for
valuation under sec.45-A or the document is impounded. Thus, there is no
uniform system adopted by the sub-registrars regarding stamp duty on
registration of joint development agreements.
To have a
clear picture of the issue, Shri S.Selvakumar, Editor, Real Estate Reporter,
took up the matter with the Inspector General of Registration and Commissioner
of Stamps under Right to Information Act,2005 and sought clarification on the
point.
As the
information furnished by this authority was not convincing, an appeal was filed
before the Appellate Authority under the Right to Information Act. The
Inspector General of Registration and Commissioner of Stamps, as an appellate
authority, has passed the following order on the subject vide his order
No.RTI/239/09-10
"In the
instant case, only agricultural land is given for development and there is no
mention of cost of construction or proposed construction etc., or there is no
consideration for such transfer. Under these facts and circumstances and in the
absence of specific case on hand, stamp duty is chargeable on the market value
of the agricultural land which is deemed to be the subject matter of transfer
under the Joint Development Agreement."
Thus, when a joint development agreement is
entered into by the landlord with the developer to develop his agricultural
land wherein no cost of construction or proposed construction is mentioned or
there is no consideration for such transfer, stamp duty payable will be on the
market value of such agricultural land and if the land in question is a
converted land, stamp duty payable will be on the market value for such
converted land and where there is a fraction of converted land with revenue
khata, stamp duty is payable on square feet basis as per guidelines value fixed
by the Central Valuation Committee.
More,
This comment has been removed by the author.
ReplyDelete